Section 13 - RTE - surrounding land?

[Gazou]

In exercising the right to enfranchisement (Section 13 notice etc.), what please is the position with regard to surrounding gardens etc.?

When describing the right to enfranchisement through acquistion of the freehold, guides referring to the Leasehold Reform Housing and Urban Development Act 1993 seem to be concerned only with the building (in this instance a block of flats with long (900+ year) leases) and are silent, so far as I am aware, with regard to the surrounding land (gardens and parking spaces).

Acquisition of the building “footprint” would be a welcome step of itself but leaving the surrounding land in the hands of the same present freeholder would frustrate a good part of the purpose of buying the freehold.

Can anyone please advise: -

1. Do similar freehold buy-out provisions per Section 13 as apply to buildings apply also to their surrounding land?

2. If so, do these provisions for buying the building and the surrounding land freeholds need to be exercised simultaneously or within some defined timeframe?

3. Is there any guidance in the legislation for valuation of surrounding land?

4. If a contract price cannot be agreed for surrounding land, is this subject to the same arbitration rules as for the building freehold?

5. Is there any mechanism laid down in the legislation for determining whether some or all of the surrounding land can be included in a freehold acquisition: in other words, does the present freeholder have the option of refusing to transfer a portion of land? How would the extent of such portion be determined?

6. The surrounding land includes another building (similar block of flats) owned and leased out on the same terms by the same freeholder and the surrounding gardens and parking, whilst easily capable of being divided between the two buildings, are not so divided at present. There is no fencing or other division, nor restrictions on access or use of these facilities as between leaseholders of either building in fact nor by the provisions of the standard form lease agreement. Could this common use of the surrounding land by leaseholders from both buildings frustrate or appreciably complicate a freehold acquistion, especially one under or in conjunction with a Section 13 enfranchisement?

Many thanks in anticipation.

[Gordon999]

You should put all your questions to your local MP and ask him/her to raise the problems with the Housing Minister.

If you think RTE of one block ( building footprint only plus the associated car park spaces ) causes "future" problems, then you may need to put more effort to involved the other block in your RTE or even an RTM may help to take over the management of the service charge of the whole site.

[Gazou]

Thanks for responding, Gordon999. Two points follow: -


(a) Your advice to include the other block in any RTE or RTM initiative is doubtless the best option. This would be my preference.

I do, however, wish to understand at this still initial investigative stage (where effort is yet to be made to win participation) whether and how some initiative involving only one block could be undertaken. If that shows proceeding with one block only is not possible or is materially less satisfactory than involving both, that may point to introducing and developing the notion of some initiative in a different manner than otherwise.


(b) I do not follow exactly why you recommend asking the local MP to raise the questions with the Housing Minister.

Is this because, per my question 1., surrounding land (aside from car parking spaces? - and access driveways?) is excluded not only from the Section 13 provisions but from any similar provision?

If primary legislation were to be required to include surrounding land (primarily gardens in this case) in any RTE initiative, then, clearly, the timeframe could easily amount to years even if there was some consensus for adopting it. That then suggests any initiative in the near future would have to be considered without assuming surrounding land could be included, or at least at a reasonable price.

[Donkin]

Your have the right to enfranchise anything you have a right of use.

If you have an easement within your lease to use the surrounding land then you can enfranchise it. Be aware that any lease relating to the surrounding land will stay in place.

In the enfranchisement notice Para 1 is the main Premises and in Para 2 you include any additional freeholds ie the lands adjoining the specified premises.

[jeffrey]

A s.13 Notice must exhibit a plan. Here's s.13(3) [and s.1(1)/s.1(2)(a) mentioned in it] to explain.

13(3). The initial notice must:
(a) specify and be accompanied by a plan showing:
(i) the premises of which the freehold is proposed to be acquired by virtue of section 1(1),
(ii) any property of which the freehold is proposed to be acquired by virtue of section 1(2)(a), and
(iii) any property . . . over which it is proposed that rights (specified in the notice) should be granted . . . in connection with the acquisition of the freehold of the specified premises or of any such property so far as falling within section 1(3)(a);

(b) contain a statement of the grounds on which it is claimed that the specified premises are, on the relevant date, premises to which this Chapter applies;
...
1. The right to collective enfranchisement.
(1) This Chapter has effect for the purpose of conferring on qualifying tenants of flats contained in premises to which this Chapter applies on the relevant date the right, exercisable subject to and in accordance with this Chapter, to have the freehold of those premises acquired on their behalf:
(a) by a person or persons appointed by them for the purpose, and
(b) at a price determined in accordance with this Chapter;
and that right is referred to in this Chapter as “the right to collective enfranchisement”.

(2) Where the right to collective enfranchisement is exercised in relation to any such premises ( “the relevant premises”):
(a) the qualifying tenants by whom the right is exercised shall be entitled, subject to and in accordance with this Chapter, to have acquired, in like manner, the freehold of any property which is not comprised in the relevant premises but to which this paragraph applies by virtue of subsection (3); and
(b) section 2 has effect with respect to the acquisition of leasehold interests to which paragraph (a) or (b) of subsection (1) of that section applies....

[Gazou]

Your have the right to enfranchise anything you have a right of use.

If you have an easement within your lease to use the surrounding land then you can enfranchise it. Be aware that any lease relating to the surrounding land will stay in place.

In the enfranchisement notice Para 1 is the main Premises and in Para 2 you include any additional freeholds ie the lands adjoining the specified premises.

Many thanks Donkin, that is good to know.

Having been prompted by Jeffrey’s response to seek sight of the Act itself, I think Sub-Section 1(3) provides for this, saying as it does: -


(3) Subsection (2)(a) applies to any property if the freehold of it is owned by the person who owns the freehold of the relevant premises and at the relevant date either—
(a) it is appurtenant property which is demised by the lease held by a qualifying tenant of a flat contained in the relevant premises; or
(b) it is property which any such tenant is entitled under the terms of the lease of his flat to use in common with the occupiers of other premises (whether those premises are contained in the relevant premises or not).

A fine Act!

Thanks again.

[Gazou]

Jeffrey, many thanks for your response. I learn (again!) that reliance upon guides is never as appropriate as seeking out the legislation in its original. Thank you for troubling to quote the relevant parts.

I have since sought out a copy of the Act and so I can now answer my own questions. Advice of any errors or omissions gratefully received!


1. Do similar freehold buy-out provisions per Section 13 as apply to buildings apply also to their surrounding land?

Yes - Sub-section 1(3).


2. If so, do these provisions for buying the building and the surrounding land freeholds need to be exercised simultaneously or within some defined timeframe?

Yes - Sub-Section 13(3)(a) requires Premises and Property to be identified by those so qualified (defined in 13(2)(b) as “qualifying tenants of flats“) to issue a Notice.


3. Is there any guidance in the legislation for valuation of surrounding land?

No.


4. If a contract price cannot be agreed for surrounding land, is this subject to the same arbitration rules as for the building freehold?

Yes - provided it is included in the Section 13 Notice.


5. Is there any mechanism laid down in the legislation for determining whether some or all of the surrounding land can be included in a freehold acquisition: in other words, does the present freeholder have the option of refusing to transfer a portion of land? How would the extent of such portion be determined?

Yes - Sub-section 1(3).

Note though that any existing rights of third parties over freehold land (e.g. rights of way) will continue.


6. The surrounding land includes another building (similar block of flats) owned and leased out on the same terms by the same freeholder and the surrounding gardens and parking, whilst easily capable of being divided between the two buildings, are not so divided at present. There is no fencing or other division, nor restrictions on access or use of these facilities as between leaseholders of either building in fact nor by the provisions of the standard form lease agreement. Could this common use of the surrounding land by leaseholders from both buildings frustrate or appreciably complicate a freehold acquisition, especially one under or in conjunction with a Section 13 enfranchisement?

Not materially - the existing rights of other leaseholders (any Another Block and Own Block non-participants in any enfranchisement) will survive any freehold transfer.

(A potential future complexity arises if on this occasion enfranchisement is sought only by Own Block participants who opt to include all surrounding gardens i.e. including those gardens surrounding Another Block (as might be appropriate given the layout of the estate).

Thereafter, could any enfranchisement by Another Block see a Section 13 Notice served on Own Block freeholders in respect of the whole of the surrounding gardens? - NO - since Own Block freeholders would not be “qualifying landlords” of the leaseholders of Another Block, that party remaining the present freeholder.)


Again, thanks for your response which was a great help.

[Gazou]

On a point of meaning, the provision, in Section 1(4), that permits a freeholder to satisfy the requirement to include appurtenant property defined in Section 1(3) rather than by selling it in a collective enfranchisement to instead grant permanent rights over it similar to those enjoyed under a lease or to substitute other freehold property, does any such granting of permanent right exclude the beneficiary of such right from any and all obligations (save for proper exercise of the right)?

Accordingly, for example, if a freeholder were to grant permanent rights to use a garden simply “for pleasure“, would such grant impose any obligations, particularly obligations to meet the cost of maintenance?


Additionally, permanent rights to use a garden simply “for pleasure” would not, of course, confer all the risks and rewards of freehold ownership: this would be less than satisfactory in the context of an RTE in that the freeholder could, for example, opt to alter the landscape or develop the land, subject to planning permission. Would the granting of a permanent right in substitution of the right per a lease to use of a garden “for pleasure” place any additional restrictions upon a freeholder?

Many thanks in anticipation.

[Gazou]

Further to the last above, from fresh research, I now understand that: -

1. The common law rules (in the absence of express wording to the contrary) impose no obligation on either party to an easement to carry out repairs to the land over which it is exercised, but give either party the right (and access) to do the work if they wish, but at their own cost.
http://www.newlawjournal.co.uk/nlj/content/righting-wrong

2. In the normal course, however, there will be express wording to the contrary. Granting of any easement (right to use another’s property) would typically only be conferred where provision is made for meeting the costs of maintenance . As a lease will usually provide for the leaseholder meeting the costs of maintenance etc. of appurtenances, then any deed granting equivalent rights (pursuant to Section 1(4), Leasehold Reform, Housing and Urban Development Act 1993) will mirror such obligations.

[jeffrey]

Also see Access to Neighbouring Land Act 1992.

[Gazou]

Also see Access to Neighbouring Land Act 1999.

Thanks. I have now read the 1999 Act. I see costs typically fall upon the Applicant of the dominant land.

In the case with which I am concerned, all the land would fall to be defined as residential land and hence any compensation award (further to Section 2(5)) would not apply.

Were there any other provisions that you consider germane please?

[jeffrey]

Thanks. I have now read the 1999 Act. I see costs typically fall upon the Applicant of the dominant land.

In the case with which I am concerned, all the land would fall to be defined as residential land and hence any compensation award (further to Section 2(5)) would not apply.

Were there any other provisions that you consider germane please?
1. Sorry- I meant '1992', not '1999' and have amended my last post.
2. True, s.2(5) excludes consideration payment in respect of residential land [defined in s.2(7)]- but only payment under that subsection.
3. That leaves s.2(1)-(4) unscathed.

Here's a link to the Act: http://www.statutelaw.gov.uk/legResults.aspx?LegType=All+Legislation&title=access&Year=1992&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&TYPE=QS&NavFrom=0&activeTextDocId=1421149&PageNumber=1&SortAlpha=0

[Gazou]

I too meant it was the 1992 Act I read.

The purpose of the Act seems inherently reasonable in that it provides by enforcement for what one would hope would happen with consent between reasonable parties holding dominant and subservient land anyway.

Thanks for pointing out the residential land exclusion is limited in its effect only to the one subsection, leaving the others unscathed.